HSBC Bank Oman: Emerging Stronger

Published: 23/08/2017 12:00 pm

ANDREW P LONG, CEO, HSBC Bank Oman

HSBC Bank Oman has made impressive strides in its 2016 performance and has secured the fifth rank in the BusinessToday-EY Best Banks and NBFC survey.

Adding 105 points to its previous year's score, the bank's overall tally adds up to 259 this time. The bank's stellar results came on the back of strong growth in net profits, reduction of non-performing loans (NPL) and growth in gross loans.

The bank's net profits grew 30.7 per cent in 2016 to RO16.9mn as compared to the 5.56 per cent growth in 2015. The bank's NPLs went down by 3.83 per cent to RO69.13, which is lesser than the 22.35 per cent reduction it achieved in 2015. To its credit, HSBC Bank Oman is the only one to maintain its NPL growth in the negative territory. The bank's gross loans grew 16.87 per cent in 2016 as opposed to 1.82 per cent growth in the previous year's survey. The bank has topped competitors in this category too.

The bank’s annual report mentioned the following in regards to its performance: “Our performance in 2016 demonstrated the fundamental strength of our business, notwithstanding the challenges posed by the economic environment and the status of the oil market. Our strong capital and prudent risk appetite helped us achieve revenue growth in a difficult market environment.

“This success was evidenced by continuous recognition in various global awards, most notably being ranked 'Safest Bank in Oman in 2016' by Global Finance Magazine.”

On net profit growth and net operating income, the report said, “Profit grew due to a combination of higher operating income and lower operating expenses partly offset by higher loan impairment charges. Net operating income before loan impairment charges, increased by 2.3 per cent to RO75.2m compared to last year during which we had some significant one-off transactions which boosted last year’s performance, including the sale of our branches in India and Pakistan.”

The bank's customer deposits were up 3.57 per cent as opposed to the 2.7 per cent dip in 2015. Its stock prices closed 20 per cent higher at 120bz as on December 31, 2016 compared 100bz in the same period in 2015. Its total assets in 2016 was RO2.25bn as opposed to RO2.2bn in 2015.

The bank's NPL to gross loans ratio is 4.61 per cent in 2016 compared to 5.6 per cent in 2015. HSBC's return on equity is 5.53 per cent, return on capital is 8.45 per cent and return on assets in 0.69 per cent.